This is what a fossil-fuel shock looks like. The UK must adapt its energy system – and quickly

## Summary
‘If the UK is to weather the shocks to come, we need to build a clean energy system for the next generation.’ Photograph: Rebecca Naden/Reuters View image in fullscreen ‘If the UK is to weather the shocks to come, we need to build a clean energy system for the next generation.’ Photograph: Rebecca Naden/Reuters This is what a fossil-fuel shock looks like. The UK must adapt its energy system – and quickly Chaitanya Kumar The Iran war will hit food prices, fuel costs and interest rates. If the UK is to weather the shocks to come, we need to build a clean energy system for the next generation. This matters because as we move to more renewable energy, gas will increasingly play the role of a backup generator when wind and solar generation is low.

## Article Content
‘If the UK is to weather the shocks to come, we need to build a clean energy system for the next generation.’
Photograph: Rebecca Naden/Reuters
View image in fullscreen
‘If the UK is to weather the shocks to come, we need to build a clean energy system for the next generation.’
Photograph: Rebecca Naden/Reuters
This is what a fossil-fuel shock looks like. The UK must adapt its energy system – and quickly
Chaitanya Kumar
The Iran war will hit food prices, fuel costs and interest rates. But with a few smart moves, we could could turn this crisis to our advantage
E
nergy shocks don’t just raise our energy bills – they can be turning points in how our economy runs. The UK responded to the energy crises of the 1970s by reshaping its energy system and doubling down on extracting its own fossil fuels from the North Sea. Investment poured in and the UK became a net energy exporter. When energy security is on the line, serious countries act at scale. Today, as the war in Iran continues, scraping the North Sea barrel for the last of its planet-heating fuel is no longer a solution. If the UK is to weather the shocks to come, we need to build a clean energy system for the next generation.
A
supply deficit
of 10m oil barrels a day and a fifth of global liquefied natural gas (LNG) trade is already having
significant effects
around the world. The UK is painfully exposed to international gas prices. The public expect
inflation to soar
, the market is
forecasting a rise
in interest rates over the next year, and costs on some government borrowing have risen to levels not seen
since the 2008 financial crisis
. This is what a fossil-fuel shock looks like for an import-dependent country, and it will not stop at energy. UK food inflation is already high,
reaching 3.3% in February
, and we are likely to see much higher food prices in
as little as three months
.
There is one hard truth: the fossil-fuel giants will not save us. New reporting shows that the hundreds of North Sea licences handed out by UK governments since 2010 have
produced only 36 days’ worth of extra gas
. Incumbent powers rarely want to transition from the system that made them powerful. This is why BP has openly
shifted back towards oil and gas
to rebuild investor confidence, while Shell has kept its bumper
share buy-back machine
running. It’s time to recognise that when you find yourself in a hole, you need to stop drilling.
We also need to stop using gas to set the
price of electricity
for every other energy source. This matters because as we move to more renewable energy, gas will increasingly play the role of a backup generator when wind and solar generation is low. It needs to be treated and paid as a backup and not the mainstay of the UK grid. Recent work from
University College London and Common Wealth
points to a practical route where gas plants get paid a fixed or regulated price, avoiding the vagaries of the wholesale market.
But market reform is not enough. People need protection on essentials. That means an
essential energy guarantee
: a basic band of energy for every household at a fixed, affordable price, with market rates applying only above that level. Similar packages were implemented in Austria, the Netherlands and Poland after the 2022 energy crisis. This is a fairer and more realistic answer than the UK’s solution after the invasion of Ukraine: a
blanket bailout
in the form of the energy price guarantee. Alongside this, the costs of social and climate policy should be wholly removed from electricity bills and put on to general taxes – which would
save over £100
for an average household. These won’t just protect those struggling to afford the heating but will also limit inflation.
The UK also needs an essential food guarantee: a protected basket of basic goods sold at low, stable prices for a defined period, backed by long-term procurement and direct support for farmers and food businesses producing those essentials here at home.
France experimented
with this back in 2023. The UK already produces
more than 60%
of all food consumed here, and the government has said it wants
public procurement
to do more to back UK produce. Britain is not on the verge of producing too little food overall, but it does have a deep dependence on imports in key foods – including fruit and vegetables and staples such as rice – as well as farm inputs (eg fertiliser), and a just-in-time supply chain with little slack to deal with shocks.
The long-term answer to getting bills down and shoring up our country’s security is, of course, powering our lives with renewable energy. The UK’s
record wind output
this year has already helped cut gas-fired generation and soften the blow from the latest spike in gas prices. At the same time, suppliers are
reporting a surge
in interest in solar panels, batteries and heat pumps as households look for ways to insulate themselves from global turmoil. This surge should come as no surprise, now that driving an electric car using smart tari

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## Expert Analysis

### Merits
- But with a few smart moves, we could could turn this crisis to our advantage E nergy shocks don’t just raise our energy bills – they can be turning points in how our economy runs.
- A supply deficit of 10m oil barrels a day and a fifth of global liquefied natural gas (LNG) trade is already having significant effects around the world.

### Areas for Consideration
N/A

### Implications
- The UK must adapt its energy system – and quickly Chaitanya Kumar The Iran war will hit food prices, fuel costs and interest rates.
- But with a few smart moves, we could could turn this crisis to our advantage E nergy shocks don’t just raise our energy bills – they can be turning points in how our economy runs.
- The public expect inflation to soar , the market is forecasting a rise in interest rates over the next year, and costs on some government borrowing have risen to levels not seen since the 2008 financial crisis .
- This is what a fossil-fuel shock looks like for an import-dependent country, and it will not stop at energy.

### Expert Commentary
This article covers energy, gas, system topics. Notable strengths include discussion of energy. Readability: Flesch-Kincaid grade 0.0. Word count: 1170.